June 2, 2021

Top 5 Pay Per Click (PPC) Metrics You Should To Be Using To Measure ROI

PPC & Digital Advertising

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Dot The i Creative
Top 5 Pay Per Click (PPC) Metrics You Should To Be Using To Measure ROI

Do you want to improve your PPC campaigns? We have 5 metrics to consider before launching your next PPC advertising campaign. 

Understanding how to calculate ways to advertise can improve the areas where you spend your money on pay per click advertising. You will have a clear view as to where you should spend more money on ads, versus what ads are not generating as much traffic. This strategy will help you to keep on budget overall. 

The first metric, which is the most important, is Return on Investment (ROI). This metric can calculate how much you can make back after investing a certain amount. It can also give insight on keywords that need to be adjusted, increasing conversion rates, and getting results on test ads.

The formula is: (Revenue - Cost)/Cost x 100 = ROI%

The second metric is Cost Per Leads, which is used to see where your campaign needs to be profitable. 

Take the number of leads that you think you can get from the campaigns:
(Advertising Budget/ Average CPC) x Landing Page Conversion Rate = Number of Leads. 

Then, determine how much it will actually cost per lead: 

Advertising Budget/ Number of Leads= CPL

This formula can be used to help determine the performance of your campaign and help your business set short term campaign goals. Also, usually there is a 3-4 day period before you will start to see improvements, so you may not be hitting all your goals on day 1. 

The third metric, Close Ratio, can show your business’ percentage of closed deals. 

Close ratio: Number of Sales/ Number of Leads= Close Ratio 

A good close rate usually varies between 20-30%.

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The variables that usually influence your close ratio include the process and turn around time when you follow up with your lead, your offer, and your brand awareness. 

Metric number four is the New Revenue Formula. 

The formula is: Number of Leads x Close Ratio x CTRV = New Revenue

This metric can be used for showing data to clients on where they can set goals and the quality of their leads. 

The last metric is Customer Lifetime Value (CLTV) which is used to determine your break-even and positive ROI points. 

The formula is: Average Number of Purchases * Average Purchase Price = CLTV

When distributing ads for your business, you should keep in mind that some people may not buy right away, and you may need to keep following up with them to help push them to choose your business. Trust will help sway a customer to keep coming back to your business. Also, try to be flexible with your services in order to format it to the customer’s needs. They will be more likely to come back if you customize things for them. And lastly, try to ask your customers to provide referrals in exchange for an incentive like a discount. 

If you need help getting a handle of your PPC ads or a solution to track everything in one place - Dot The i Creative is here for you. Our specialists are certified, and up-to-date conversion trends. Click the link below to schedule a meeting and chat more about your pay per click goals.

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Dot The i Creative

Dot The i Creative (DTi Creative for short) is a full service digital marketing agency offering Search Engine Optimization, PPC & Digital Advertising, Social Media Management, Website Design & Development, Marketing Automation, and Content Creation Services in the Dublin, Ohio and Columbus, Ohio area.

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